Question: Please answer clearly and use steps! Question 1. The risk-free rate of return (rRF) is currently 11%. The market demanded rate of return (rM) is

Please answer clearly and use steps!

Question 1.

The risk-free rate of return (rRF) is currently 11%. The market demanded rate of return (rM) is 14% (Market Risk Premium is 3%). According to analysts, PT Hegarmanah shares traded on the stock exchange have a beta coefficient of 1.5. If the next expected dividend to be paid (D1) is $ 2.25, with constant (g) growth of 5%. What is the equilibrium price of PT Hegarmanah's shares?

Question 2

If any of the following happens:

- Bank Indonesia increased the circulation of money so that the Risk-free rate of return (rRF) fell to 9%,

- The attitude of investors towards risk decreases so that the Required rate of return demanded by the market (rM) becomes 11%,

- Changes in the composition of the board of directors of PT Hegarmanah have increased shareholders' expectations that stable sales and profits will occur with a constant growth rate of 6% and the beta coefficient to 1.3.

What is the equilibrium price of PT Hegarmanah's shares?

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